The recording of all these transactions in the books of the tenant, XYZ Co. Ltd., are the opposite of those of the landlord. If XYZ Co. Ltd. records its transactions on cash basis, the double entry used to record the transactions when XYZ Co. Ltd. pays the monthly rentals is: –

Balance Sheet

Income Statement

DR

CR

DR

CR

Rental expense

xxxx

Cash at bank

xxxx

1.The double entry for the recording of the security deposits is: –

Balance Sheet

Income Statement

DR

CR

DR

CR

Refundable deposits (current assets):

–Rentals

3,000

–Utility

500

Cash at bank

3,500

2.The double entry for the recording of the 8 months rental (March 2006 to October 2006) is: –